HR department is among the most complicated departments within a company. It serves various functions and purposes, such as employee recruitment, administration, payroll, and tax filing. The list can keep getting longer as they also take care of the legal compliance, manage employee training and development, as well as retain files and records.
Increased government regulation also complicates HR workings depending on size and structure of the organisation. Based on a survey, 50 percent companies feel lack of confidence in keeping up with regulatory requirements. Oftentimes, HR practitioners are busy with administrative functions rather than focusing on the core business. Hence, outsourcing HR could be an alternative to resolve the problem.
In the past, people used to believe that HR outsourcing is best suited to be applied in large-scale businesses. The logic is, as they work on a wider scope, they would need brighter talents on hand. However, this notion is not necessarily true.
On the contrary, HR outsourcing is better practiced in small-scale businesses. HR outsourcing helps smaller companies to develop without paying extra costs for hiring extra personnel. Not only this, the HR vendors could provide assistance in compliance issues, to reduce the risk of failure and comply with government regulations.
Basically, there are two types of HR outsourcing services. Some offer general services that cover all HR functions, while the others are focusing on specialised jobs such as legal compliance and employee recruitment. Whatever your company’s HR needs are, HR outsourcing does help.
Based on recent findings, 40-50 percent of top 500 companies in the world rely on outsourcing their HR functions with more than 2.2 million jobs available. The previous ADP report found that there are four most compelling reasons why HR outsourcing is becoming the new trend in business.
See: The Pros of Outsourcing HR
39 percent people believe that HR outsourcing will reduce costs. Human capital is the most valuable asset for a company. Their dedication is powerful force for business sustainability. However, they are expensive and difficult to manage. HR outsourcing will take care of employee administration and records, so the employer can recruit and screen potential talents needed by the company as and when required.
28 percent people view HR outsourcing as minimising risks. Nowadays, state and federal laws on employment change frequently. More or less, this condition makes it difficult for employers to keep up with regulations, as it will affect the workplace. HR outsourcing will help the corporation to comply with these laws, as well as conduct systematic audit on company policy.
27 percent people consider HR outsourcing to increase employee opportunity in the field of work. Leaders are always in search for the best talents to expand their business. With regular training and development, HR outsourcing can help employees’ perform better, and be more engaged with the business goals.
14 percent people believe HR outsourcing will increase efficiency and productivity. With the help of advanced HR technologies used by outsourcing vendors, managers do not need to spend their time working on administrative functions. With less time invested in doing the paperwork, leaders will have more time to focus on the core business plan.
Also read: Hiring Activity to Grow in India by 10% to 15% in 2017
